During 2019, Company A had net credit sales of Php 600,000. Its Accounts Receivable and Allowance for Doubtful Accounts as of December 31, 2019 before adjustment are Php 100,000 and Php 2,000, respectively. The age of the receivables are as follow: Php 40,000: 0-60 days old; Php 60,000: over 60 days old. If the company uses Percentage of Sales, and based on past experience, 1% of net credit sales is deemed uncollectible, what should be the amount of Doubtful Accounts Expense to recognize?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
19. During 2019, Company A had net credit sales of Php 600,000. Its
The age of the receivables are as follow: Php 40,000: 0-60 days old; Php 60,000: over 60 days old.
If the company uses Percentage of Sales, and based on past experience, 1% of net credit sales is deemed uncollectible, what should be the amount of Doubtful Accounts Expense to recognize?
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